World Bank prices two tranches; light high-grade volume forecast; Union Pacific notes soften

By Cristal Cody

Tupelo, Miss., April 7 – Primary action in the high-grade bond market stayed mostly quiet on Friday, and light supply is expected in the shortened holiday week ahead.

The International Bank for Reconstruction and Development, also known as the World Bank, priced $350 million of five-year fixed- and floating-rate notes.

World Bank raised the funds from two offerings to Swedish insurer Folksam that were customized to meet Folksam’s investment needs, according to the release on Friday.

The Folksam Group said it plans to expand its investments in bonds that support environmental and social goals.

“Our engagement in green bonds benefit our customers directly, as their money contributes to environment- and climate-friendly projects, while they generate safe returns,” Jens Henriksson, Folksam Group president and chief executive officer, said in the release.

Skandinaviska Enskilda Banken was the lead manager.

“Working with investors and the World Bank we are learning how the finance community can help address global development priorities,” Christopher Flensburg, SEB head of climate and sustainable finance, said in the release. “Folksam’s investment in World Bank bonds shows the role that investors can play in achieving a more inclusive financial sector.”

With the latest sales, World Bank said its green bond issuance has hit a total of $10.05 billion for climate investments in developing countries. The bank has issued more than 130 green bonds in 18 currencies since 2008.

Looking ahead to the upcoming week, light market action is expected. The bond markets will close early on Thursday and will be closed entirely on April 14 for the Good Friday holiday.

Syndicate sources expect about $10 billion of high-grade deal volume in the week ahead with most of the issuance likely in the first two sessions.

Following the holiday week, Australian financial services company Suncorp-Metway Ltd. plans to hold a roadshow for a dollar-denominated Rule 144A and Regulation S bond offering.

In other activity on Friday, Union Pacific Corp.’s senior notes (A3/A/) softened in secondary trading.

The Markit CDX North American Investment Grade index ended the day mostly unchanged at a spread of 65 basis points.

World Bank prices bonds

World Bank priced $350 million of five-year fixed- and floating-rate notes (Aaa/AAA/) in the offering, according to the release.

World Bank sold $300 million of 2% five-year notes at 99.943.

The bank priced $50 million of five-year floaters at par to yield Libor plus 1 bp.

SEB was the lead manager.

The global development financing cooperative is based in Washington, D.C.

Union Pacific softens

Union Pacific’s 3% notes due April 15, 2027 weakened in secondary trading over the day and headed out at 99.29 after trading as high as 99.89 at the start of the session, according to a market source.

The notes last traded on Thursday at 99.47.

Union Pacific sold $500 million of the notes on March 29 at 98.608 to yield 3.163% and a spread of 77 bps over Treasuries.

The company’s 4% notes due April 15, 2047 traded weaker at 99.26 from 99.43 in the previous session.

Union Pacific sold $500 million of the 30-year notes in the March 29 offering at 98.655 to yield 4.078%, or a spread of Treasuries plus 107 bps.

The railroad transportation company is based in Omaha.

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